The Vanguard Lifestrategy funds have been a cornerstone of my
globally diverse passive portfolio for several years. They had been on my
watchlist for a couple of years prior to my first purchase of the VLS60 in May
2015.
Since I started to move my portfolio towards more
climate-friendly funds last year, I was concerned about the over exposure of
the funds to the oil & gas sector due to its 25% equity allocation to the
FTSE All Share index. For the past 10 months, I have been in regular contact
with Vanguard Investors urging them to provide some low carbon sustainable
funds as an alternative for investors who wish to avoid oil stocks. Despite
many assurances that they are working towards such offerings, so far nothing
has materialised.
I recently learn from @ShareAction (Twitter) that Vanguard's executives in the US have been voting to prevent the directors of big oil
companies such as Exxon, Dominion and Duke from facing accountability on
climate. This is a big red line for me.
I therefore no longer wish to be associated with a company
that protects the likes of Exxon from climate scrutiny and have decided to dispose of my Lifestrategy 40 fund and will close my Vanguard Investor
ISA. I have emailed Vanguard UK to inform the management of the reasons for
leaving and I hope they will pass this on to the senior executives in the US.
The funds - VLS60 and 40 - have provided a steady return over the
past four years - combined is just over 40% in total, so no complaints on that score. I
realise my actions will be a mere drop in the ocean but I hope Sean Hagerty and
the senior executives in the US will start to take our climate emergency
seriously when investors begin to withdraw their investments and assets under
management start to fall.
As ever, this article is merely a record of my personal investment decision to sell and should not be regarded as a recommendation - always DYOR!
Bold move but in accordance with your values.
ReplyDeleteI don't intend to make any changes to my own portfolio just yet, haven't got the time to research where I would park my investments if not with Vanguard.
Something for the future to consider.
Yes weenie, I always try to remind readers that this blog is just a record of my personal investment decision and of course others will have their own agenda, timeframe, values etc. so will make their independent decisions.
DeleteI too have to mull over where to reinvest the proceeds but leaving it in cash at the present time should not be a problem. Schroder's ISF Global Climate fund is a possibility but it doesn't seem to be available with my current brokers.
Hats off to you. Always refreshing to hear someone sticking to ethical principles when it comes to investing.
ReplyDeleteI too have been urging Vanguard to set up a genuine 'climate' tracker fund over the last few months but without success. Their 'brush off' is polished and well rehearsed. And ultimately wholly unconvincing!
I'm therefore considering withdrawing my ISA investments from their platform. I hold VWRL and their global bond tracker. My only hesitation is finding a suitably cheap alternative. My overall pf contains a fair amount of 'green' funds on the HL platform but the reason i went to Vanguard was to keep the remaining costs right down.
Suggestions welcome!
Thanks bernie. I'm sure if Vanguard UK really wanted to offer a climate-friendly option, they could easily have done so by now.
DeleteI am also on the look out for an alternative low cost tracker but I think the industry is not fully up to speed on the climate issues and maybe not yet confident the demand is there from the retail investors. However, the landscape is changing rapidly so I think we should not have to wait too much longer.
Vanguard does seem to be behind iShares that seems to be launching a number of ETFs based on MSCI ESG indices. Not all available on the usual UK platforms yet.
ReplyDeleteThat may well be the case but the fact remains - according to the analysis in this report - that both Vanguard and BlackRock continue to be the driving force behind the continuing climate crisis by protecting these major oil multinationals from facing scrutiny and accountability.
DeleteUntil that changes in a fundamental way, regardless of their ESG offerings, I will look elsewhere for my investments.